The World Bank has stated that the elimination of import restrictions in Nigeria could elevate approximately 1.3 million individuals from poverty, as outlined in the December 2023 release of the Nigeria Development Update (NDU) report.
Simultaneously, some members of the House of Representatives proposed restricting imports of items producible within the country. Additionally, the Central Bank of Nigeria (CBN) recently removed foreign exchange restrictions on 43 items, encompassing essentials like rice, fertilizer, and cement.
Applauding the CBN’s initiative, the World Bank commends it as a pro-poor measure, emphasizing its positive impact on consumer welfare.
Excerpts from the report reads, “Import restrictions disproportionately affect goods that are consumed more by the poorer households. For example, rice—a staple food for about 84 per cent of Nigerian households and consumed in both locally produced and imported varieties—has seen escalating prices, a trend exacerbated by import restrictions.
“Recent World Bank estimates show that removing import restrictions could lower the prices of affected items by 4.7 per cent. This would lead to an overall increase in purchasing power which, in turn, would lift about 1.3 million people (around 0.6 percent of the population) out of poverty.”
The Bretton Woods institution additionally highlighted that specific states will experience more pronounced benefits from the positive impacts on poverty reduction resulting from the elimination of import restrictions.
Notably, Kaduna, Ekiti, Enugu, FCT, Kwara, Anambra, Adamawa, Cross River, and Kebbi are anticipated to be the most significant beneficiaries, while Rivers, Akwa Ibom, Ondo, Abia, Imo, and Ebonyi are expected to gain comparatively less.
The World Bank acknowledged potential challenges in certain sectors due to the removal of import restrictions but emphasized that these challenges could be mitigated by leveraging comparative advantages. It urged the government to streamline the overall cost of doing business and implement complementary reforms to support Nigeria’s structural agenda, fostering gains in competitiveness and economic diversification.